Income Tax Act

Marginal note:Definitions

• 122.7 (1) The following definitions apply in this section.

  adjusted net income

  adjusted net income of an individual for a taxation year means the amount that would be the individual’s income for the taxation year if

  • (a) [Repealed, 2018, c. 27, s. 12]

  • (b) in computing that income, no amount were included under paragraph 56(1)(q.1) or subsection 56(6), in respect of any gain from a disposition of property to which section 79 applies or in respect of a gain described in subsection 40(3.21); and

  • (c) in computing that income, no amount were deductible under paragraph 20(1)(ww) or 60(y) or (z). (revenu net rajusté)

  cohabiting spouse or common-law partner

  cohabiting spouse or common-law partner of an individual at any time has the meaning assigned by section 122.6. (conjoint visé)

  designated educational institution

  designated educational institution has the meaning assigned by subsection 118.6(1). (établissement d’enseignement agréé)

  eligible dependant

  eligible dependant of an individual for a taxation year means a child of the individual who, at the end of the year,

  • (a) resided with the individual;

  • (b) was under the age of 19 years; and

  • (c) was not an eligible individual. (personne à charge admissible)

  eligible individual

  eligible individual for a taxation year means an individual (other than an ineligible individ-ual) who was resident in Canada throughout the taxation year and who was, at the end of the taxation year,

  • (a) 19 years of age or older;

  • (b) the cohabiting spouse or common-law partner of another individual; or

  • (c) the parent of a child with whom the individual resides. (particulier admissible)

  eligible spouse

  eligible spouse of an eligible individual for a taxation year means an individual (other than an ineligible individual) who was resident in Canada throughout the taxation year and who was, at the end of the taxation year, the cohabiting spouse or common-law partner of the eligible individual. (conjoint admissible)

  ineligible individual

  ineligible individual for a taxation year means an individual

  • (a) who is described in paragraph 149(1)(a) or (b) at any time in the taxation year;

  • (b) who, except where the individual has an eligible dependant for the taxation year, was enrolled as a full-time student at a designated educational institution for a total of more than 13 weeks in the taxation year; or

  • (c) who was confined to a prison or similar institution for a period of at least 90 days during the taxation year. (particulier non admissible)

  return of income

  return of income filed by an individual for a taxation year means a return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is required to be filed for the taxation year or that would be required to be filed if the individual had tax payable under this Part for the taxation year. (déclaration de revenu)

  working income

  working income, of an individual for a taxation year, means the total of

  • (a) the total of all amounts each of which would, if this Act were read without reference to section 8, be the individual’s income for the taxation year from an office or employment,

  • (b) all amounts that are included because of paragraph 56(1)(n) or (o) or subparagraph 56(1)(r)(v) in computing the individual’s income for a period in the taxation year, and

  • (c) the total of all amounts each of which is the individual’s income for the taxation year from a business carried on by the individual otherwise than as a specified member of a partnership. (revenu de travail)

• Marginal note:Optional amounts

  (1.1) An individual may determine the total amount for the definition working income for both the individual and the individual’s eligible spouse, if applicable, for a taxation year as if the Act were read without reference to paragraph 81(1)(a) and subsection 81(4) and if so, the individual shall determine the total amount for the definition adjusted net income for both the individual and the individual’s eligible spouse, if applicable, for the taxation year as if the Act were read without reference to paragraph 81(1)(a) and subsection 81(4).

• Marginal note:Receipt of social assistance

  (1.2) For the purposes of applying the definitions eligible dependant and eligible individual in subsection (1) for a taxation year, an individual shall not fail to qualify as a parent (within the meaning assigned by section 252) of another individual solely because of the receipt of a social assistance amount that is payable under a program of the Government of Canada, the government of a province or an Indigenous governing body (as defined in section 2 of the Children’s Special Allowances Act) for the benefit of the other individual, unless the amount is a special allowance under the Children’s Special Allowances Act in respect of the other individual in the taxation year.

• Marginal note:Secondary earner exemption

  (1.3) For the purposes of subsections (2) and (3),

  • (a) if an eligible individual had an eligible spouse for a taxation year and the working income for the year of the eligible individual was less than the working income for the year of the eligible spouse, the eligible individual’s adjusted net income for the year is deemed to be the amount, if any, by which the eligible individual’s adjusted net income for the year (determined without reference to this subsection) exceeds the lesser of

    • (i) the eligible individual’s working income for the year, and

    • (ii) $14,000; and

  • (b) if an eligible individual had an eligible spouse for a taxation year and the working income for the year of the eligible individual was greater than or equal to the working income for the year of the eligible spouse, the eligible spouse’s adjusted net income for the year is deemed to be the amount, if any, by which the eligible spouse’s adjusted net income for the year (determined without reference to this subsection) exceeds the lesser of

    • (i) the eligible spouse’s working income for the year, and

    • (ii) $14,000.

• Marginal note:Deemed payment on account of tax

  (2) Subject to subsections (4) and (5), an eligible individual for a taxation year who files a return of income for the taxation year is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount, if any, determined by the formula

  A - B

  where

  A

  is

  • (a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, the lesser of $1,395 and 27% of the amount, if any, by which the individual’s working income for the taxation year exceeds $3,000, and

  • (b) if the individual had an eligible spouse or an eligible dependant, for the taxation year, the lesser of $2,403 and 27% of the amount, if any, by which the total of the working incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $3,000; and

  B

  is

  • (a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 15% of the amount, if any, by which the adjusted net income of the individual for the taxation year exceeds $22,944, and

  • (b) if the individual had an eligible spouse or an eligible dependant, for the taxation year, 15% of the amount, if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $26,177.

• Marginal note:Deemed payment on account of tax — disability supplement

  (3) An eligible individual for a taxation year who files a return of income for the taxation year and who may deduct an amount under subsection 118.3(1) in computing tax payable under this Part for the taxation year is deemed to have paid, at the end of the taxation year, on account of tax payable under this Part for the taxation year, an amount equal to the amount, if any, determined by the formula

  C - D

  where

  C

  is the lesser of $720 and 27% of the amount, if any, by which the individual’s working income for the taxation year exceeds $1,150; and

  D

  is

  • (a) if the individual had neither an eligible spouse nor an eligible dependant, for the taxation year, 15% of the amount, if any, by which the individual’s adjusted net income for the taxation year exceeds $32,244,

  • (b) if the individual had an eligible spouse for the taxation year who was not entitled to deduct an amount under subsection 118.3(1) for the taxation year, or had an eligible dependant for the taxation year, 15% of the amount, if any, by which the total of the adjusted net incomes of the individual and, if applicable, of the eligible spouse, for the taxation year, exceeds $42,197, and

  • (c) if the individual had an eligible spouse for the taxation year who was entitled to deduct an amount under subsection 118.3(1) for the taxation year, 7.5% of the amount, if any, by which the total of the adjusted net incomes of the individual and of the eligible spouse, for the taxation year, exceeds $42,197.

• Marginal note:Eligible spouse deemed not to be an eligible individual

  (4) An eligible spouse of an eligible individual for a taxation year is deemed, for the purpose of subsection (2), not to be an eligible individual for the taxation year if the eligible spouse made a joint application described in subsection (6) with the eligible individual and the eligible individual received an amount under subsection (7) in respect of the taxation year.

• Marginal note:Only one eligible individual

  (5) If an eligible individual has an eligible spouse for a taxation year and both those individuals would be, but for this subsection, eligible individuals for the purposes of subsection (2) in respect of the taxation year,

  • (a) if the individuals agree on which individual is the eligible individual for the taxation year, only that individual shall be an eligible individual for the purposes of subsection (2) in respect of the taxation year; and

  • (b) in any other case, only the individual that the Minister designates is the eligible individual for the purposes of subsection (2) in respect of the taxation year.

• Marginal note:Application for advance payment

  (6) Subsection (7) applies to an individual for a taxation year if,

  • (a) at any time after January 1 and before September 1 of the taxation year, the individual makes an application (or in the case of an individual who has, at that time, a cohabiting spouse or common-law partner, the two of them make a joint application designating the individual for the purpose of subsection (7)), to the Minister in prescribed form, containing prescribed information; and

  • (b) where the individual and a cohabiting spouse or common-law partner have made a joint application referred to in paragraph (a)

    • (i) the individual’s working income for the taxation year can reasonably be expected to be greater than the working income of the individual’s cohabiting spouse or common-law partner for the taxation year, or

    • (ii) the individual can reasonably be expected to be deemed by subsection (3) to have paid an amount on account of tax payable under this Part for the taxation year.

• Marginal note:Advance payment

  (7) Subject to subsection (8), the Minister may pay to an individual before the end of January of the year following a taxation year, one or more amounts that, in total, do not exceed one-half of the total of the amounts that the Minister estimates will be deemed to be paid by the individual under subsection (2) or (3) at the end of the taxation year, and any amount paid by the Minister under this subsection is deemed to have been received by the individual in respect of the taxation year.

• Marginal note:Limitation — advance payment

  (8) No payment shall be made under subsection (7) to an individual in respect of a taxation year

  • (a) if the total amount that the Minister may pay under that subsection is less than $100; or

  • (b) before the day on which the individual has filed a return of income for a preceding taxation year in respect of which the individual received a payment under that subsection.

• Marginal note:Notification to Minister

  (9) If, in a taxation year, an individual makes an application described in subsection (6), the individual shall notify the Minister of the occurrence of any of the following events before the end of the month following the month in which the event occurs

  • (a) the individual ceases to be resident in Canada in the taxation year;

  • (b) the individual ceases, before the end of the taxation year, to be a cohabiting spouse or common-law partner of another person with whom the individual made the application;

  • (c) the individual enrols as a full-time student at a designated educational institution in the taxation year; or

  • (d) the individual is confined to a prison or similar institution in the taxation year.

• Marginal note:Special rules for eligible dependant

  (10) For the purpose of applying subsections (2) and (3), if an individual (referred to in this subsection as the “child”) would be, but for this subsection, an eligible dependant of more than one eligible individual for a taxation year, the child is deemed only to be an eligible dependant of

  • (a) if the individuals agree, the agreed upon individual; and

  • (b) in any other case, the individual designated by the Minister.

• Marginal note:Effect of bankruptcy

  (11) For the purpose of this Subdivision, if an individual becomes bankrupt in a particular calendar year

  • (a) notwithstanding subsection 128(2), any reference to the taxation year of the individual (other than in this subsection) is deemed to be a reference to the particular calendar year; and

  • (b) the individual’s working income and adjusted net income for the taxation year ending on December 31 of the particular calendar year is deemed to include the individual’s working income and adjusted net income for the taxation year that begins on January 1 of the particular calendar year.

• Marginal note:Special rules in the event of death

  (12) For the purpose of this Subdivision, if an individual dies after June 30 of a calendar year

  • (a) the individual is deemed to be resident in Canada from the time of death until the end of the year and to reside at the same place in Canada as the place where the individual resided immediately before death;

  • (b) the individual is deemed to be the same age at the end of the year as the individual would have been if the individual were alive at the end of the year;

  • (c) the individual is deemed to be the cohabiting spouse or common-law partner of another individual (referred to in this paragraph as the “surviving spouse”) at the end of the year if,

    • (i) immediately before death, the individual was the cohabiting spouse or common-law partner of the surviving spouse, and

    • (ii) the surviving spouse is not the cohabiting spouse or common-law partner of another individual at the end of the year; and

  • (d) any return of income filed by a legal representative of the individual is deemed to be a return of income filed by the individual.